Griffon to purchase Ames True Temper for $542 million; company expects additional acquisitions

By Jennifer Lanning Drey

Portland, Ore., July 19 - Griffon Corp. has entered into a definitive agreement to acquire Ames True Temper, Inc. for $542 million and foresees the potential for additional acquisitions in the future, Ron Kramer, Griffon's chief executive officer, said during a Monday conference call.

"While this is our first major deal, I'm very confident that others will follow. We have a vision for this company as a large, diversified enabler of portfolio companies," he said.

The Ames True Temper acquisition will be financed by a $500 million term loan commitment from Goldman Sachs Lending Partners LLC and about $75 million of Griffon cash. The committed financing will include a $150 million asset-based lending facility, according to a news release.

The combined assets of Ames True Temper and Griffon's Clopay building products and performance plastics subsidiaries will secure the borrowings under the financing commitments.

Because Griffon is not a guarantor of the debt, the company has "absolute capacity" to execute another acquisition, Kramer said.

"While it's clearly a large transaction for Griffon, it's well within our financing capacity and leaves us with ample liquidity to look for other opportunities," he said.

Griffon expects to have more than $200 million of cash at the corporate level following the closing of the acquisition.

Kramer also said that tuck-in acquisitions are among its growth strategies for Ames True Temper going forward, as Griffon believes there is significant opportunity to layer in new categories and brands.

"We believe there are a number of good targets to consider, and we will be taking a close look at that strategy as a means of utilizing our balance sheet to accelerate [Ames True Temper's] growth and strategic development plan," he said.

Ames True Temper also has the potential for organic growth as well as international expansion, particularly in Latin America and the Pacific Rim, he said.

The transaction is expected to close by Sept. 30.

Ames True Temper is a Camp Hill, Pa.-based manufacturer and marketer of wheelbarrows, garden tools and other outdoor work products.

Griffon is purchasing the company from Castle Harlan Partners IV, a fund of Castle Harlan, Inc.

"We are very excited about taking this next step," Kramer said.

New York-based Griffon is a management and holding company that conducts business through its wholly owned subsidiaries.

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